Nonlinear Analysis and Chaotic Characterization in Annual GDP Growth Rates of National and Supranational Entities

The Annual Growth Rate of Gross Domestic Product of an economy is often seen as a key indicator to the economy’s growth and prosperity. In the present work, nonlinear analysis is performed on the GDP growth data of nations and supranational entities using two key tools, namely Averaged Lyapunov Exponent (ALE) and Distance Plot. The analyses ascertain the presence of chaos in the GDP growth rate data for both nations and supranational entities. Following this, some key inferences from the nonlinear analysis are presented, such as the high value of ALE obtained for fragile and conflict ridden economies, indicating the relationship between ALE and instability, the ALE analysis of BRICS nations as well as low ALE values of supranational entities such as OECD and EU. It is opined that the obtained results pave the way for unlocking a wealth of information regarding GDP growth rates ushering in a new era of ‘Smart Economics’.
Category:Economics and Finance

Behavioral Economics: What Can We Learn from the Shiva Sutras?

Behavioral Economics, which essentially studies psychology, cognition and emotion in the context of economics, has proved that economics in the real world is not always with mathematical accuracy, predictability and clockwork precision. In an attempt to categorize the driving influences and biases underlying decisions made by people, the present article takes a leaf out of the Shiva Sutras, which essentially group the 51 Aksharas (Alphabets) of the Sanskrit language, each Akshara signifying a concept or mode of operation, into 14 categories or ‘worlds’. Essentially, the Aksharas form ‘alignments’ that drive people toward making economic and other decisions. Consequently, such a listing can be quantified using matrices and appropriate weights, thus bringing Behavioral Economics a step closer to becoming a quantifiable, deterministic study.
Category:Economics and Finance

Chaos Theory and Nonlinear Analysis for the Business Strategist

The complex nature of the growing organization has in recent years necessitated a fundamental change towards management strategy and formation of policies. In this light, the present article focuses on the use of various tools and techniques of nonlinear analysis, including Time Series, Phase Portrait, Multiscale Analysis, Polar Plots, Largest Lyapunov Exponents, Fractal Dimension and Kolmogorov Entropy to analyze important data such as the share revenue and price, and draw conclusions to reveal key information about public sentiment and market trends. The management could potentially use this information towards effective formation of various policies such as compensation, dividend declarations and layoff operations.
Category:Economics and Finance

Introducing Marxian Productivity Development Economics

In the first part of this paper, a neoclassical framework is proposed which places the Marxian conceptions of both Constant Capital and Variable Capital into a Cobb-Douglas production function like model in order to obtain the mathematical formulations of Marx labour value function and Marx surplus value function as well as Marx production function , which leads to the Marxian 1st theorem about technical progress: . In the second part, the general equilibrium properties of the quantitative Marxian productivity theories are investigated by using variation method. The Marxian 2nd theorem about dynamic equilibrium asserts, there is a input-output equilibrium existed in the reproduction process between Two Departments ; The Marxian 3rd theorem states that only equilibrium growth leads to the positive value of the productivity parameter which is defined as the product of the change rate of the organic composite of capital with the labor output elasticity of Cobb-Douglas production function[ ], as well as the rising rate of profit. The present paper is also a generalization of the precise conditions under which the profit rate rises or falls. Only when an economic system achieves the Marxian equilibrium including its each production Department, there would be no business cycle; otherwise there exists some potential crisis. At last, an econo-sociological Marxism model is proposed as a criterion for a regional optimal economic growth.
Category:Economics and Finance